Ellis v. Whitewater Auto, Inc.

662 F.Supp.3d 971

Brittney ELLIS, Plaintiff, v. WHITEWATER AUTO, INC. d/b/a Pron-Tow Towing and Jeffrey Zingg, Defendants.

Case No. 20-CV-37-JPS

United States District Court, E.D. Wisconsin

Signed March 20, 2023

James A. Walcheske, Scott S. Luzi, Walcheske & Luzi LLC, Brookfield, WI, for Plaintiff.

Ralph E. Johnson, Axley Brynelson LLP, Janesville, WI, for Defendants.

ORDER

J.P. Stadtmueller, United States District Judge

1. INTRODUCTION

Plaintiff Brittney Ellis ("Plaintiff") brought this action on January 9, 2020 pursuant to the Fair Labor Standards Act, 29 U.S.C. § 201 (the "FLSA"), and the Wisconsin Wage Payment and Collection Laws ("WWPCL"), alleging that Defendants Whitewater Auto, Inc. d/b/a Pron-Tow Towing and Jeffrey Zingg (collectively, "Defendants") failed to pay her overtime wages and failed to pay her minimum wages—or wages at all—for her last two days of employment. ECF No. 17; ECF No. 39 at 1.

On July 18, 2022, the Court held a bench trial on Plaintiff's claims. ECF Nos. 35, 38. The Court found that Plaintiff is owed both overtime wages and wages for her last two days of employment. ECF No. 38 at 140-47. The Court ordered the parties to attempt to resolve the issues of damages and attorneys' fees amongst themselves. Id. at 147. When the parties were unable to resolve these issues, the Court referred the matter to Magistrate Judge Nancy Joseph for a report and recommendation. See Sept. 19, 2022 text order.

On February 7, 2023, Magistrate Judge Joseph issued her Report and Recommendation ("R&R"), in which she recommends awarding Plaintiff $2,354.72 in overtime pay and $2,354.72 in liquidated damages under the FLSA; $193.50 in unpaid wages and $96.75 in liquidated damages under the WWPCL; $60,720.00 in attorneys' fees; and $3,091.13 in costs. ECF No. 46. On February 17, 2023, Plaintiff filed objections to the R&R. ECF No. 47. Defendants did not file a response to Plaintiff's objections. For the reasons set forth herein, the Court will overrule Plaintiff's objections, and adopt in part and overrule in part Magistrate Judge Joseph's R&R.

2. LEGAL STANDARD

"When reviewing a magistrate's recommendation, the Court is obliged to analyze de novo 'those portions of the report or specified proposed findings or recommendations to which objection is made.' " United States v. Wicks, No. 20-CR-143-JPS, 2021 WL 4786307, at *1 (E.D. Wis. Oct. 13, 2021) (quoting 28 U.S.C. § 636(b)(1)(C)). The Seventh Circuit has explained that

[d]e novo review requires the district judge to decide the case based on an independent review of the evidence and arguments without giving any presumptive weight to the magistrate judge's conclusion. The district judge is free, and encouraged, to consider all of the available information about the case when making this independent decision. A district judge may be persuaded by the reasoning of a magistrate judge or a special master while still engaging in an independent decision-making process.

Mendez v. Republic Bank, 725 F.3d 651, 661 (7th Cir. 2013). "Being persuaded by the magistrate judge's reasoning, even after reviewing the case independently, is perfectly consistent with de novo review." Id. "That said, '[t]he magistrate judge's recommendation on a dispositive matter is not a final order, and the district judge makes the ultimate decision to adopt, reject, or modify it.' " Farmer v. DirectSat USA, No. 08-CV-3962, 2015 WL 13310280, at *1-*2 (N.D. Ill. Sept. 24, 2015) (quoting Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 760 (7th Cir. 2009)).

"If no objection or only partial objection is made, the district court judge reviews those unobjected portions for clear error." Johnson v. Zema Sys. Corp., 170 F.3d 734, 739 (7th Cir. 1999). "Under the clear error standard, the Court can only overturn a Magistrate Judge's ruling if the Court is left with 'the definite and firm conviction that a mistake has been made.' " Wilkins v. Overall, No. 316CV01324DRHRJD, 2018 WL 6617139, at *1 (S.D. Ill. Dec. 18, 2018) (quoting Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d 926, 943 (7th Cir. 1997)).

3. ANALYSIS

Plaintiff's objections to the R&R relate to Magistrate Judge Joseph's recommendation "that the hourly rates of Attorneys James A. Walcheske and Scott S. Luzi be 'no more than $400/hour.' " ECF No. 47 at 1. Thus, the Court will review this issue de novo. For the reasons set forth below, the Court overrules Plaintiff's objections and adopts Magistrate Judge Joseph's R&R on this issue.

Upon review of the remainder of the R&R, the Court finds that Magistrate Judge Joseph delivered meticulous and sound analyses on the issues of overtime pay and liquidated damages under the FLSA, unpaid wages and liquidated damages under the WWPCL, and litigation costs. Therefore, the Court will adopt those portions of the R&R and issue judgment in favor of Plaintiff for the following amounts: $2,354.72 in overtime pay and $2,354.72 in liquidated damages under the FLSA; $193.50 in unpaid wages and $96.75 in liquidated damages under the WWPCL; and $3,091.13 in costs.

However, the Court is left with the "definite and firm conviction that a mistake has been made" as to Magistrate Judge Joseph's recommendation that Plaintiff receive an award of attorneys' fees of $60,720.00. Wilkins, 2018 WL 6617139, at *1. While the Court concurs with Magistrate Judge Joseph's use of the lodestar to determine the fee award, based on the Court's observations over the course of the litigation and during the bench trial, the Court does not agree that the number of hours submitted by Plaintiff's counsel is reasonable. ECF No. 46 at 17 ("The starting point for determining reasonable attorneys' fees is the lodestar method, which is calculated by multiplying the number of hours reasonably expended by the reasonable hourly rate.") (citing Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 639 (7th Cir. 2011)). The Court further believes that reductions should be applied to the calculated lodestar amount after comparing it to variables specific to this case. Id. at 17-18 ("[O]nce the lodestar is determined, the court may adjust the fee upward or downward based on a variety of factors, the most important of which is the degree of success obtained.") (quoting Hensley v. Eckerhart, 461 U.S. 424, 430 n.3, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)).

For the reasons set forth below, the Court will overrule Magistrate Judge Joseph's R&R on the issue of attorneys' fees, and order that Plaintiff receive an award of $16,006.30 in reasonable attorneys' fees.

3.1 Hourly Rate

As Magistrate Judge Joseph summarized, ECF No. 46 at 19, in the Seventh Circuit, "[t]he attorney's actual billing rate for comparable work is presumptively appropriate to use as the market rate." Spegon v. Catholic Bishop of Chi., 175 F.3d 544, 555 (7th Cir. 1999). "However, if the district court is unable to determine the attorney's actual billing rate because, for example, the attorney has no fee-paying clients, then the district court should look to the next best evidence." Id. (emphasis added). In turn, the next best evidence includes "evidence of rates similarly experienced attorneys in the community charge paying clients for similar work and evidence of fee awards the attorney has received in similar cases." Id.

Before Magistrate Judge Joseph, Plaintiff requested rates of $450/hour for both Attorney James A. Walcheske ("Attorney Walcheske") and Attorney Scott S. Luzi ("Attorney Luzi"), and $325/hour for Attorney Matthew Tobin ("Attorney Tobin"). ECF No. 40 at 3. Plaintiff's counsel explains that Attorneys Walcheske's and Luzi's "usual and customary rates" increased from $400/hour to $450/hour as of April 1, 2022. Id. Nonetheless, Plaintiff requests rates of $450/hour for Attorneys Walcheske and Luzi for all entries billed in this litigation dating back to January 2020. ECF No. 40-1. In support of the motion for fees, Plaintiff attaches (1) invoices paid by fee-paying clients showing a billing rate of $450/hour for Attorneys Walcheske and Luzi; (2) three cases where Attorneys Walcheske and Luzi were court-approved at billing rates of $450/hour; and (3) declarations from Attorney Robert Mihelich ("Attorney Mihelich"), who avers that his hourly rate is $450/hour, and Attorney David Zoeller, who avers that his hourly rate is $500/hour. ECF Nos. 41, 42.

Plaintiff's objections are grounded on arguments that Defendants did not satisfy their burden of demonstrating why a lower hourly rate should be awarded as to Attorneys Walcheske and Luzi, and that Magistrate Judge Joseph erred by failing to use the invoices paid by Attorneys Walcheske's and Luzi's fee-paying clients before turning to other evidence. ECF No. 47. Plaintiff also takes issue with Magistrate Judge Joseph's reduction of Attorneys Walcheske's and Luzi's rates to $400/hour "based on nothing more than counsel's years of practice as compared to" other attorneys. Id. at 4 n.2.

Plaintiff challenges the fact that Magistrate Judge Joseph set aside invoices paid by Plaintiff's counsel's fee-paying clients and turned right away to a review of the next best evidence. However, in Spegon, invoices paid by fee-paying clients were only one example of how a district court may determine an attorney's actual billing rate. 175 F.3d at 555. And, following Spegon, the Seventh Circuit held that "[a]lthough the district court must consider [the] submitted evidence . . . the court is entitled to determine the probative value of each submission and must arrive at its own determination as to a proper fee." Small v. Richard Wolf Med. Instruments Corp., 264 F.3d 702, 707 (7th Cir. 2001). In Small, the Seventh Circuit affirmed the district court's decision that sample invoices were of limited probative value because they "failed to distinguish" between FLSA overtime cases and other types of cases. Id. As the court explained, FLSA cases "are not unusually complicated" and, therefore, "[h]ourly rates awarded in non-FLSA overtime cases are not particularly...